12.28.2015

PRINT--Small Is Beautiful by E.F. Schumacher

Any intelligent fool can make things bigger, more complex, and more violent. It takes a touch of genius — and a lot of courage — to move in the opposite direction.

E.F. SCHUMACHER

I recently stated a truth in an email to my brother-in-law. All college professors should be conservatives, and all entrepreneurs and businessmen should be left wing hippie types. The reason conservatives make such good professors is because they still believe in things like objective truth, reading the great books, beauty, and order. Contrast this with the leftist Marxist postmodern professors who teach that language cannot convey meaning except when it oppresses some aggrieved minority. The reason lefties make such good entrepreneurs is because they have this crazy idea that creating value is better than making money. The irony is that they end up making a lot of money.

I don't know if E.F. Schumacher was exactly a conservative as his thinking evolved over his lifetime such that he moved from atheism to Buddhism to Catholicism. That later Catholicism makes him a conservative to me in that he embraced all those things that make conservatives great professors--order, truth, goodness, and beauty. And when I read Small Is Beautiful, I couldn't help but conclude that Schumacher would agree with my assessment of hippie entrepreneurs. You only have to look at Steve Jobs, Ben & Jerry, or Yvon Chouinard to win that argument.

Small Is Beautiful is the one volume of non-marxist economics that could occupy space on the shelf of a hippie. The book is a collection of essays that debunks the idea that "bigger is better." Bigger is merely bigger, but it is rarely better. We realize this when the giant factory that drew farmers from the fields for an easier life on the assembly line goes bust laying them off for a life of destitution. Schumacher questioned the conventional wisdom only to discover that what he was seeking already existed in the social teachings of the Catholic Church.

Schumacher was essentially a distributist. Distributism holds that economies are more stable and serve human needs better when capital is distributed widely instead of concentrated in the hands of big government or big business. Whatever benefits are derived from the economies of scale that big outfits may bring, they are negated by the externalities of those operations such as pollution, chaotic business cycles, layoffs, and people dependent upon charity and welfare.

The defenders of the "bigger is better" models tend to reduce everything to economic output. This would be product and profit. The thing they overlook is that economics should serve human beings. What reigns today is the belief that human beings should serve economics. This is how you get a factory that churns out things to make people's lives better except their lives are made worse by the air pollution and the fact that they can't afford those products on their meager wages. If you doubt this happens, look at Beijing where the air is utterly toxic now as a byproduct of their "prosperity." I joked that the free market would solve the dilemma by selling fresh air in a can. Then, the free market did exactly that.

It would be comic if it wasn't so tragic. This points to the absurdities of economics where people don't matter. The Catholic Church teaches that an economy should serve human ends and needs. The simple fact is that Beijing was better off when the primary mode of transportation was the bicycle. Progress now renders the air unbreathable.

Small is Beautiful is essential reading for anyone who has come to question modern economics and realize the failures of a world where people have smartphones but no flush toilets. We value the wrong things, and that is the point of the book. Since its publication, I would add that today people live for no other purpose than to indulge the luxury and gluttony of a handful of very rich people and a government that exists for government. Distributism is the way out of this mess.